Financial services industry recovering

The financial services industry of Britain is slowly starting to come back from the banking crisis with profits starting to consistently rise and companies starting to feel as if growth will occur largely over the year of 2010.  However, the volumes are still flat which may mean that the improvement in profits is the result of cost cutting and better efficiency instead of actual new business.

A new report from PricewaterhouseCoopers and the CBI outlines concern that there is too much legislative burn on the industry, and that to stay in compliance businesses will be forced to spend much more.

The chief economic advisor of the CBI, Ian McCafferty, stated that the financial services sector should show steady signs of activity in the next three months and continue to grow stronger, but the long term outlook is still somewhat fuzzy.

Lending fell to companies although it increased to private individuals at the same time that building societies saw an influx in business and banking fell.

The report also stated that most financial service companies are hoping that lending will start to increase among their customer base in the next quarter which will help them become profitable and lift up their business volumes.

At the same time, regulation fears will continue to dampen growth outlooks over the course of the year ahead as companies will be forced to spend more simply to stay in compliance with the new legislation which makes the future a bit hazier to industry experts.